US House passes budget bill to end shutdown

by | February 9, 2018 5:26 pm

The US House of Representatives has passed a two-year budget bill to end a brief government shutdown and boost government spending by hundreds of billions of dollars, following the Senate’s approval of the measure early on Friday.

Around 5:30am in Washington, lawmakers voted by 240 to 186 to approve the budget legislation. Sixty-seven Republican representatives voted against the bill in an extraordinary rebellion and a measure of the discontent among conservatives about the bulging US deficit.

The shutdown — the second of the year — began at midnight after Republican senator Rand Paul of Kentucky blocked Congress from meeting a deadline to fund federal agencies.

Mr Paul used a manoeuvre and lengthy floor speech to delay voting in protest at his own party’s profligate spending — to the fury of his colleagues. The Senate eventually passed the bill at 2am by 71 to 28.

The two-year budget bill, brokered by Senate Republican and Democratic leaders earlier in the week, will raise spending for the Pentagon and domestic programmes by $300bn over two years. The deal, which followed months of bitter wrangling, was intended to eliminate the periodic crises where the federal government closes or heads towards the brink of shutdown.

Mr Paul expressed anger at Republicans pushing legislation that would boost the deficit despite having spent years criticising Democrats for doing the same.

Tonight, you could feel the frustration and embarrassment growing in Congress as we exposed the hypocrisy of Republicans who are joining in an unholy alliance and spending free-for-all with Democrats at the expense of the American people and our party’s supposed principles,” Mr Paul tweeted after the bill passed.

The spending increases authorised in the bill are largely unfunded and will add to a yawning deficit. The difference between government income and outlays is set to become one of the biggest outside of wars and recessions after Congress passed $1tn of tax cuts in December.

Incorporating the cost of the budget bill, Goldman Sachs estimated the deficit would rise to $1.1tn or 5.2 per cent gross domestic product next year.

That would be well short of deficits as a share of GDP reached after the Great Recession or the second world war. It is comparable to the shortfall after the recession of the early 1980s under Ronald Reagan, even though the US is now at full employment and the global economy is enjoying a strong upswing.

Republican Paul Ryan, speaker of the House, welcomed the legislation, saying in early morning debate on the floor of the chamber: “Republicans and Democrats came together on a bipartisan measure. I think that is something to celebrate.”

He also vowed to make a “sincere commitment” to “finding a solution” for the country’s “Dreamers”, or undocumented immigrants who came to the US as young children. The remarks came after Democrat Nancy Pelosi, minority leader, renewed her call for Congress to take action on immigration.

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